| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Irish Economy Last Updated: Aug 24, 2010 - 4:49:58 PM


Ireland gets 10th ranking for most attractive destinations for foreign direct investment (FDI) in Europe in 2009; Irish FDI employment back to 1998 levels
By Michael Hennigan, Founder and Editor of Finfacts
Jun 16, 2010 - 5:29:54 AM

Email this article
 Printer friendly page

Ireland has dropped one place to 10th in a ranking of the most attractive destinations for foreign direct investment (FDI) in Europe in 2009, according to the 8th annual Ernst & Young European Attractiveness Survey. Irish FDI employment is back to 1998 levels.

The report, which examines figures for international investments into Europe, new projects or expansions, revealed that overall Europe remained ‘open for business’ in 2009. Despite the economic downturn, Europe still secured 3,303 investment announcements, down from 3,718 in 2008, a modest 11% decline. The number of jobs created was 124,923, down from 148,333 in 2008, continuing a downward trend that began in 2004.

FDI jobs into Ireland drop due to 'exceptional' 2008 performance: Job numbers in Ireland which have resulted from FDI have fallen 45% (2008/2009) according to the report. Just 3,461 jobs were created in 2009 compared to 6,335 in 2008. The report confirms that 2009 also saw a 22% decline in the number of FDI projects announced in Ireland, with just 84 new FDI projects announced compared to 108 in 2008.

However, Mike McKerr, Senior Partner with Ernst & Young’s Irish firm advises that the 2009 results should be viewed in the context for Ireland’s 'exceptional' FDI growth in 2008.“In 2008 Ireland saw an unprecedented 45% increase in FDI investment, something which was unlikely to be repeated in 2009; so a sizable fall in FDI job numbers and new missions was expected. Today’s data shows a rebalancing of the FDI numbers and accurately reflects the economic conditions domestically and internationally,” he says.

McKerr continues, “2009 FDI volumes across Europe are down and Ireland is not immune to this downward trend. However, the country still possesses enviable qualities which continue to attract FDI. The decrease in our cost base has made Ireland more competitive and is likely to reflect itself in the 2010 ranking. That coupled with our skills base and highly attractive corporation tax rate will provide the ecosystem needed to attract international business.”

We at Finfacts, being optimists at heart, would prefer not to have to pour some cold water on Mike Kerr's use of the word 'exceptional.' Being also realists, we like to deal with facts.

Ireland has a large stock of FDI for its economic size and the expansion of existing facilities, gives an opportunity for spin when the underlying reality is pretty bleak.

In Ireland, total permanent full-time employment in the manufacturing and internationally traded services sectors amounted to 272,053 in 2009. It was 276,287 in 1998. Employment in foreign-owned firms was 132,596 in 2009 and 140,281 in 1998.

In the five years to 2009, chemical and medical device exports, which account for more than half of merchandise exports, grew by 26% but employment hovered around 40,000 in the sector throughout the period.

In the boom years of 2004-2008, IDA Ireland companies added an average of 11,000 new jobs annually, with 60% in financial services and software. It lost an average of 9,600 annually.

In international rankings, Germany surpasses Brazil to become the fifth most attractive investment location. The rankings are led by China, India, and the USA, followed by Russia and Germany. China reconfirmed its position as the top location worldwide, while India gained slightly to surpass the USA in this year's survey. Germany's jump is remarkable, in the context of overall European performance in the survey, according to State agency Germany Trade & Invest. Despite a decrease in attractiveness of both Western and Eastern Europe - - the latter experiencing a sharper drop - - - Germany strengthened its position.

40% of Irish FDI based in financial services and software: The largest investor in Ireland remained the United States of America (USA) with 37 projects; however the number of FDI projects originating from the USA has dropped from 61 in 2008.

The second largest investor was the United Kingdom (UK) 16 projects (down from 20 in 2008), followed by Japan (4 projects), Switzerland, France and Bermuda (contributing 3 projects each; US management consultants Accenture, decided in 2009 to move its incorporation from Bermuda to Ireland). Multiple investments were also made by China (1 investment), Denmark, Netherlands, Germany and Italy.

Ernst & Young says Ireland’s strength in financial services contributed to 20% of all FDI projects into the country in 2009.Today’s report also confirms the continuing strength of Ireland’s technology industry  -- specifically the software sector - - which accounted for 20% of all FDI related jobs and saw a two fold increase in the number of new missions in the sector from 2008 to 2009.

McKerr says, “In terms of the number of FDI projects, it is software which currently leads in terms of attracting FDI into Ireland. This corresponds with Ernst & Young’s recent Globalisation Index, which ranks the most globalised economies,with Ireland topping the charts as the most globalised nation in terms of its technology industry. Today’s findings further demonstrate the international strength of this sector”.

Dublin’s continuing attraction:
The European Investment underlined Dublin’s consistent popularity, ranked as the 5th most attractive city for inward investment in Europe in 2009, despite falling one place from 4th in 2008 (overtaken by Moscow) . However, Dublin has fallen from 4th position (2008) having been overtaken by Moscow in the last 12 months. The current top 10 most attractive European locations for FDI are:

(1) London, (2) Paris, (3) Madrid, (4) Moscow, (5) Dublin, (6) Milan, (7) Barcelona, (8) Frankfurt, (9) Dussseldorf, (10) Amsterdam.

Dublin secured 41 new projects in 2009, eight fewer than in 2008. Cork came second securing 10 new projects with Galway, Limerick and Dundalk making the top 5 most attractive counties in Ireland for attracting FDI.

McKerr says that Dublin’s ranking should be celebrated particularly in the context of exceptionally tough economic times; but he warns that this is no time for complacency.

“The global economy is evolving fast with China, India, Brazil and the Middle East joining the traditional players of North America, Europe and Japan as both the destinations and sources of global investment."

“With capital now clearly flowing in multiple directions, we need to continue to excel at our core competencies as a country, as well as encourage further development of policy which is pro business and pro entrepreneurship, giving certainty and confidence to enable us to invest in the sectors of tomorrow.”

Northern Ireland - Belfast: Belfast was the UK's second most attractive location for FDI in 2009. The city jumped from 3rd place (2008) to overtake Manchester in the most recent ranking. The UK's most attractive location for FDI in 2009 by city are London, Belfast, Bristol, Birmingham and Manchester.

Belfast attracted 15 new FDI projects mostly in software, electronics and financial services with the US generating half of all FDI into Belfast in 2009.

Winners and losers across Europe: The largest European economies held up relatively well in terms of their ability to attract inward investment in 2009. In addition to the UK’s strong performance, project numbers in France, Italy and Germany were up 1%, 4% and 7% respectively. There were some other winners; Russia, Ukraine and Turkey bucked the trend of their neighbours in Eastern Europe by all posting increases in the number of projects in 2009.

With a 4% decline in European GDP there were some big losers in 2009 as well. The impact of the recession was most dramatic in countries like Poland, Hungary, Romania and the Czech Republic where project numbers fell collectively by 40% as investors sought the stability of the larger Western economies.

There were also some dramatic shifts in where the projects into Europe originated from. The US, which continues to account for roughly a quarter of all projects into Europe, saw a 16% decline in 2009. This contrasts with China, whose investments into Europe surged by nearly 30%, with project numbers increasing from 87 to 111.

This year’s European attractiveness survey marks a dramatic turning point. Europe still attracts attention, deals and investments, but these projects clearly have far less employment traction. On average, a new FDI project in Europe creates 69 jobs compared with 101 in 2006.

That is also consistent with the pattern in Ireland.

 

Investors love the stability of Europe and it continues to be a place for high levels of direct investment, but growth in the Eurozone is needed, Jim Turley, CEO of Ernst & Young, told CNBC. Regulation needs to streamlined and competition increased to achieve growth, Turley added:

 

2010 outlook: a modest improvement ahead? As well as analysing project data for 2009, the European Attractiveness Survey looks at investment outlook by asking over 800 executives about their future intentions. Although a high percentage of those asked (53%) said they would be likely to pause a while longer before committing to further investment in Europe, the investment environment is showing signs of improvement from 12 months ago.

McKerr concludes,
“We saw a definite acceleration in the fourth quarter of 2009 in project announcements as investors became more confident. The current problems around the Euro notwithstanding, we expect that 2010 overall will show a modest pick-up in project numbers and at least a flat-lining in job creation numbers.”

The Ernst & Young’s European attractiveness 2010 survey is based on a twofold, original methodology that reflects: The “real” attractiveness of Europe for foreign investors. The evaluation of the reality of FDI in Europe is based on Ernst & Young’s European Investment Monitor (EIM). This database tracks FDI projects that have resulted in new facilities and/or the creation of new jobs. By excluding portfolio investments, mergers and acquisitions, it shows the reality of investment in manufacturing or services operations by foreign companies across the continent.

The “perceived” attractiveness of Europe and its competitors by foreign investors. E&Y define the attractiveness of a location as a combination of image, investors’ confidence and the perception of a country or area’s ability to provide the most competitive benefits for FDI. The field research was conducted by Institut CSA in January and February 2010, via telephone interviews, based on a representative panel of 814 international decision-makers.

Related Articles
Related Articles


© Copyright 2010 by Finfacts.com

Top of Page

Irish Economy
Latest Headlines
Finfacts launches new news site
Irish Farmers & Milk Prices: 'Shackles' off in April; Demanding safety-net in August
Irish pension managed funds returns at over 12% year-to-date in 2015
Irish chartered accountants' salary packages surge 13% in 12 months
Irish services PMI fastest rate since late 2006; Official data up only 2.4% in 12 months
Irish Economy: Tax €893m above target in year to July — €653m from corporation tax
Fact and Fiction: Time to review Ireland's economic statistics?
Irish M&A deals H1 2015: Dutch or UK firm acquires Irish firm for €32.6bn - they are both American
Irish manufacturing PMI strong in July
Irish Economy: Fall in GNP in Q1 2015; GDP rises
Irish Economy 2015: Central Bank lauds strong recovery; Time to start paying down debt
Irish Budget 2016: Ibec demands 20 tax cuts, spending and investment rises
Low pay in Ireland; Lowest social security & corporate taxes in Europe
Ireland vs Greece: Enda Kenny's false claims on growth, taxes and debt
Irish standard of living in 2014 below Euro Area average, Italian level; Prices 5th highest in EU28
Irish goods exports rose a record 30% in April - due to fake tax-related transactions
Mexican tall ship to sail into Dublin on June 17th
Irish industrial production up 20% in first four months of 2015; Construction down 2.6% in first quarter
Irish Economy 2015: ESRI slams return to boom-time pro-cyclical fiscal policy
Irish pension fund returns in average range 1.6% - 1.8% in May 2015
Irish service sector PMI remains strong; Tax avoidance clouds data
Ireland: Official unemployment rate at 9.8% in May; Broad rate at 19% — 440,000 people
Ireland: Fiscal Council warns of dodgy forecasts, no plan; OECD warns of new property bubble
Irish Public Finances: Tax revenue in first five months of 2015 €734m ahead of target
No simple measure of economic progress in Ireland: GDP & GNP defective
Irish manufacturing PMI rises in May; Production up unbelievable 45% in year to March!
ESRI says data volatility hinders Irish economic forecasting; Tax avoidance taboo cause
Ireland at 16 in international competitiveness ranking; US, Singapore and Hong Kong on top
Irish Economy 2015: Sectors to add 200,000 jobs?; Broad jobless rate at 19%
Irish Export Performance: Myths and reality - Ireland is a poor exporter
Irish Economy: 41,300 jobs added in 12 months to Q1 2015 - Construction up 19,600
China-Ireland: Economic relationship on a slow burn
Estonia, Austria, France, Ireland head global alcohol rankings
Irish Exchequer Returns: Tax receipts under target in April but ahead in year
Irish service sector PMI rose in April
Irish manufacturing PMI remained strong in April- includes overseas manufacturing
Irish Live Register + 90,000 activation scheme numbers at 439,000 in April
Ireland: Coalition drops 2018 full-employment target
Ireland Spring Statement: Noonan promises 200,000 net new jobs by 2018
Irish Economy 2015: Retail sales volume up 1.4% in month of March